Question

Security Specialists performs security services for local businesses. During 2011, Security Specialists performed $915,700 of security services and collected $930,000 cash from customers. Security Specialist’s employees earned salaries of $42,350 per month. During 2011, Security Services paid salaries of $491,410 cash for work performed. At the beginning of 2011, Security Specialists had $2,875 of supplies on hand. Supplies of $80,000 were purchased during the year, and $12,150 of supplies were on hand at the end of the year. Other general and administrative expenses incurred during the year were $31,000.
Required:
1. Calculate revenue and expenses for 2011.
2. Prepare the 2011 income statement.
3. Describe the accounting principles used to prepare the income statement.